Business Model of Home Markets Final Report Date Download the full document at: www.gazhoo.com

Agenda Introduction Current Situation Markets and Competitors New Business Model Implementation 1. Download the full document at: www.gazhoo.com

Introduction

Current Situation

Markets and Competitors

New Business Model

Implementation

Objectives and scope Client X has started a ‘Margin Improvement Programme’ comprising of five initiatives One of these initiatives is aimed at the European ‘Home Markets’ development of an adapted business model performance improvement plans The following countries have been part of the study Germany (subsidiary X) United Kingdom (Subsidiary A) Finland (sister company X) Sweden (Client X Sweden AB) Iberia (Company X) Download the full document at: www.gazhoo.com

Client X has started a ‘Margin Improvement Programme’ comprising of five initiatives

One of these initiatives is aimed at the European ‘Home Markets’

development of an adapted business model

performance improvement plans

The following countries have been part of the study

Germany (subsidiary X)

United Kingdom (Subsidiary A)

Finland (sister company X)

Sweden (Client X Sweden AB)

Iberia (Company X)

The Home Markets project consists of four phases Project management Communication between Project Team and Management Teams Home Markets Key issues Approach per home market Work Plan Planning and Visioning Financials and orga-nization Market and compe-titors Country Factbases Current situation analysis Phase 1 Phase 2 Adjusted business model Phase 3 Implementation Phase 4 Implementation (out of scope) Alternative models Benefits and risks Business Model Imple-mentation Implemen-tation plan Organ-ization Financials Download the full document at: www.gazhoo.com

The project has been a joint effort of Client X rgn X, the country management teams and XYZ Project Team Steering Committee XYZ Germany UK Finland Sweden Project Structure Margin Improvement Programme Management Home Markets Project Programme Management Office Download the full document at: www.gazhoo.com

The project has taken three months Project Group Meetings 24.11 12.12 28.01 10.02 16.02 23.02 Project Timeline Download the full document at: www.gazhoo.com November December January February 1. Planning and Visioning Key issues, work plan Country templates 2. Situation Analysis Country kick-off meetings Data gathering and analysis Country feedback meetings Fact base finalisation 3. Adjusted Business Model Options identification Options evaluation Country discussions 4. Implementationning

Project Group Meetings

1. Planning and Visioning

Key issues, work plan

Country templates

2. Situation Analysis

Country kick-off meetings

Data gathering and analysis

Country feedback meetings

Fact base finalisation

3. Adjusted Business Model

Options identification

Options evaluation

Country discussions

Executive Summary 1. Current Situation: Profitability in the Home Markets is very modest The five home markets generated a 4.7% EBIT margin on average annual sales of € 163m Revenues are decreasing or stagnating since 2001 in all countries and for most activities Virtually all the profit is generated from dredging in Germany and the UK 2. Markets and Competitors: Client X does not exploit all its competitive advantages After a downturn, the market outlook is fairly stable with a moderate upturn on the mid term Client X is market leader with a decentralised business model Most competitors however have a more centralised, more focused approach the decentral approach of Client X limits economies of scale management is distracted by a large number of activities without strategic and financial benefits Rohde Nielsen en de Boer are growing faster than Client X New investments in large/effective equipment require larger scale of operations and more coordination thus centralisation Download the full document at: www.gazhoo.com

1. Current Situation: Profitability in the Home Markets is very modest

The five home markets generated a 4.7% EBIT margin on average annual sales of € 163m

Revenues are decreasing or stagnating since 2001 in all countries and for most activities

Virtually all the profit is generated from dredging in Germany and the UK

2. Markets and Competitors: Client X does not exploit all its competitive advantages

After a downturn, the market outlook is fairly stable with a moderate upturn on the mid term

Client X is market leader with a decentralised business model

Most competitors however have a more centralised, more focused approach

the decentral approach of Client X limits economies of scale

management is distracted by a large number of activities without strategic and financial benefits

Rohde Nielsen en de Boer are growing faster than Client X

New investments in large/effective equipment require larger scale of operations and more coordination thus centralisation

Executive Summary (ctd) 3. New Business Model: A new ‘Area’ is needed to support more focused local operations The new Area will create economies of scale in tendering, operations and overheads as well better coordination across the area Inclusion of the Netherlands dredging activities will further strengthen these effects Local operations will be limited to financially/strategically contributing activities Regional managers will still have more local exposure than competitors which should result in better local marketing Revenues will drop by 15%, but EBIT will increase by around € 3.4m 4. Implementation The transition requires about six month of preparation so the new model can take effect after the summer of 2004 Transformation costs are about € 6m in pay-offs and other net cash costs and around € 4m in asset write-offs The payback of the cash cost is two years Download the full document at: www.gazhoo.com

3. New Business Model: A new ‘Area’ is needed to support more focused local operations

The new Area will create economies of scale in tendering, operations and overheads as well better coordination across the area

Inclusion of the Netherlands dredging activities will further strengthen these effects

Local operations will be limited to financially/strategically contributing activities

Regional managers will still have more local exposure than competitors which should result in better local marketing

Revenues will drop by 15%, but EBIT will increase by around € 3.4m

4. Implementation

The transition requires about six month of preparation so the new model can take effect after the summer of 2004

Transformation costs are about € 6m in pay-offs and other net cash costs and around € 4m in asset write-offs

The payback of the cash cost is two years